Keep a balance between centralised, decentralised hiring: VMware HR head

Organisations should make a conscious balance between the two and flex one approach v/s the other where needed, says Aniruddha Banerjee of VMware

TimesJobs.com Bureau

Large technology organisations are trying hard to become nimble and one way they are doing it by moving away from centralised functions and pinning their hopes on decentralistion, including in the hiring process. But will this pay off or lead to local team move out of sync with organisational goals?

Aniruddha Banerjee, senior director- human resources of cloud and virtualisation services company VMware India
suggests a balance between the two, as any tilt towards one or the other can stifle growth.

Here are edited excerpts from a recent interview:

How much decentralisation is good and at what stage should it be stemmed?

There should be a balance between centralisation and decentralisation. In organisations with evolved processes/systems and relatively fewer organisational/industry changes, they can lean towards a decentralised approach and be assured that the equilibrium will be maintained, since there isn't much of a chance for too much deviance. In companies or industries that are rapidly going through change, evolution and disruption, they may need to tip the scale a bit more towards centralisation so that business teams outside of the head office are all going in the same direction. This slight tip towards centralisation is also needed where robust and sustainable process and systems are not prevalent. Decentralisation should be curbed when an organisation in a region is moving in a direction which is diametrically opposed to the overall corporate agenda. Also, when people feel like they are working for another company or are developing an "US vs Them" mentality, then decentralisation has gone too far.

What is the take of IT companies such as yours when it comes to hiring and recruitment?

In companies like VMware, we ensure that we have consistent global processes, systems and hiring strategies. We also look for a globally consistent hiring standard and candidate experience. At the same time, we trust the local recruiting teams to understand the local market nuances and subtly adjust how we attract talent. For example, in annual salary benchmarking the basket of comparator companies may be slightly different than what is used in head office. Another area is regarding compensation strategies. For example, the mix of compensation levers to attract the right candidates will differ from market to market. In some developing economies, the lure of equity or bonus is considered less important than a strong base salary. Therefore, offer strategies need to be slightly adjusted.

How is such a move different from the way that HR has been functioning till date, especially given increased globalisation of companies as they expand?

We constantly straddle the line between centralisation and decentralisation and this depends on the HR function and how different it needs to be practiced in the market. Some Centres of Excellence (COEs) need to be centralised regardless of location whereas others are more effective having a slightly higher accentuation towards decentralisation. For example, at times, global talent development outside of the headquarters need to be tuned towards more leadership training and soft skills programmes as they often are growing their organisations at a faster pace. In these cases, a decentralised approach is advisable.

Though decentralised approach may ensure quicker response, what are the drawbacks?

When a function or organisation becomes too decentralised or "maverick", often that function is out of step with the priorities/goals of corporate. This can have the adverse impact of working against the best interests of the organisation. This also leads to local employees feeling disconnected with the larger organisation.

What proactive steps must companies take to address each of these issues?

The balance between centralisation and decentralisation is predicated on developing strong global relationships of influence where colleagues in both head office and the regions co-decide on what makes most sense for the organisation. Proactively communicating with your global counterparts, sharing information and sharing in successes is a constructive way of keeping this delicate balance.

What are the pros and cons of a decentralised move on companies?

Decentralised companies can be nimble locally and are able to embrace and capitalise appropriately on the local market. We spoke above of the downside of going "too decentralised". Centralised companies definitely have the entire organisation going in the same direction so they share a common language and culture. The downside is that often the regions merely implement and this leads to dissatisfaction as employees don't feel involved in the decision making process. Also, companies that are too centralised often are not nimble enough in the local market, as they adopt a "one size fits all" which can be out of step with what is needed locally. There is no right or wrong answer, but organisations should make a conscious balance between the two and flex one approach vs the other where needed.